EU Banks Should Work Together to SurviveAuthor: Mikki Donaldson
During these times, which seem to be most challenging for citizens banking in Europe, the thought or concern is that EU banks should work together to survive. The economic and political partnerships of the EU and other sovereigns began shortly after WWII with the promise of interdependence and to prevent another war. Overall, its goal is to promote economic growth, to provide order and stability.
The United States and members of the EU have consistently worked together in support of this project since the birth of its conception. In the past, this investment returned a partnership that was strong among the trade lines. This year’s most surprising upset was the Brits vote to leave the European Union. With this decision are the consequences of an uncertain economy.
Deep in the Eurozone
The nature of a past debt crisis shows us that causes were related to banking bailouts and due to the government’s poor performance. The constitution of the Eurozone, plus the absence of a fiscal union contributes to the current crisis as well as place limits on what leaders can do.
The European banking systems are deep in this debt crisis (commonly referred to as the Eurozone Crisis) and have been since 2009 as they own a rattling amount of debt, hence the shock when the UK’s decision was released announcing its departure from the European Union.
It’s unbelievable that a country who was once setting standards of excellence has experienced extended periods of slow and null growth. Several countries remain depressed. Additionally, there was little growth in the countries who would choose the euro as their own currency. The numbers are not much higher than from 2007.
True… there are many aspects that contribute to this drop off, however, the thought is that EU banks should work together to manifest prosperity. The problem with creating the euro is that no one took into consideration the establishment of the institutions that would allow for the nation’s innovation and the euro’s functionally says Joseph E Stiglitz, former chief economist of the World Bank.
In a nutshell, the euro has not kept its promises to keep its nation in prosperity or from unwanted political ties. The Eurozone is not at peace – there’s a war going on between the north and the south, fueled with feelings of betrayal and fury. Somehow, this scenario is all too familiar to some of the old timers there in Europe.
When it comes to handling the political and economic factors of the Brexit, some believe that it’s in everyone’s best interest that some kind of deal is worked out between the democratic party and those wavering on either side of the Channel.
Moving on could prove difficult, however, there are positive alternatives, which can be used to create a new foundation for rebuilding trust and monumental growth. Recalling past efforts and reinforcing what was once learned will aid in structuring a brighter and more progressive future.
British prime minister Theresa May reveals her thoughts on the European banking situation. Mrs May advises that “sticking together” would be most useful in these times. More so, she warns those dealing with world finances and big business that things must change or else deal with the wrath of Balkanisation.
Sandro Gozi, the Italian Secretary of State for European Affairs suggests that “Europe needs an immediate answer on growth, youth and security issues.” This was said during a discussion with European leadership in Italy recently (September, 2016). Regretfully, young adults will see first hand the results a financial crisis and succession, especially when it comes to employment or rather the lack thereof.
The EU and other countries should look for areas to cut costs and avoid added expenditures. It should also be noted that the debt crisis, Brexit and terrorist acts brutally interrupt the fruits of the European labour force. Signing a traditional currency will help to eliminate any confusion and further upset. In order to restore Europe, EU banks should work together to survive this particular crisis.